Does the Rise in Housing Prices Squeeze Export Energy in China?

Liu Bin, Wang Naijia

Journal of Finance and Economics Vol. 42, Issue 05, pp. 53 - 65 (2016)  DOI:10.16538/j.cnki.jfe.2016.05.005

Abstract

Too fast rise in housing prices will bring a wide range of impacts on the entire society and economy. Although academia and government policy makers have recognized the impact of the rise in housing prices on productive investment, corporate innovation, entrepreneur behavior and corporate finance, the relationship between the rise in housing prices and enterprise export has not been drawn enough attention. And what is the relationship between the rise in housing prices and the export performance of enterprises? Based on the data of export enterprises in 35 large and medium-sized cities, this paper uses Heckman two-stage model to estimate the effect of the rise in housing prices on export performance of enterprises. It comes to the results as follows: firstly, the rise in housing prices increases the export quantity, but hinders the increase in export product categories, the improvement of export technical complexity and the expansion of export markets; and in general, the rise in housing prices leads to the reduction in the amount of enterprise export; secondly, the rise in housing prices has different heterogeneity effects on different types of enterprises, and has more prominent negative effect on small and medium-sized manufacturing, private and processing trade enterprises; thirdly, the internal mechanism concerning the effect of the rise in housing prices is embodied in the squeeze of export energy mainly through labor costs, financing constraints, R&D and labor mobility. This paper provides not only the enlightenment of a more comprehensive understanding of the social impact of the rise in housing prices, but also the reference about how to deal with current enterprise export dilemma for governments.

Keywords

the rise in housing prices; intensive margin; extensive margin; enterprise export; internal mechanism